A controversial Arizona sheriff known for taking a hard line against illegal immigrants has been stripped of some of his powers in what he described as a political move by the Obama administration.

Joe Arpaio, a gruff lawman who styles himself as America's toughest sheriff, has won acclaim from US anti-immigrant forces for his relentless pursuit of mostly Hispanic illegal immigrants in Maricopa county, Arizona, a fast-growing county of 4 million people that is home to Phoenix, the nation's fifth largest city.

Arpaio's aggressive tactics include the jailing of illegal immigrants in tent cities surrounded by barbed wire in the middle of Arizona's searingly hot summers, the reduction of meal costs to 20 cents per day, the use of pink jail clothing for men, and chain gangs for women inmates.

Arpaio also came in for criticism when he appeared on the Fox reality show Smile: You're Under Arrest.

Under a two-year-old agreement with the federal department of homeland security, Arpaio and his deputies had been authorised to enforce federal immigration law by arresting suspected illegal immigrants in the field and by checking the immigration status of people arrested on other offences. The department of homeland security includes the US immigration and customs enforcement (ICE) agency.

But after drawing thousands of complaints and a civil rights investigation from the justice department, Arpaio was this week stripped of his federal authority to make immigration arrests. County attorney Andrew Thomas, one of Arpaio's supporters, condemned the "setback in the fight against illegal immigration".

For his part Arpaio has promised to continue chasing illegal immigrants using state laws. In an angry press conference, he called US homeland security officials "liars" and said he would personally drive those caught on the streets to the border if federal officers refused to take arrested illegal immigrants into custody. "I'll take a little trip to the border and turn them over to the border," he said.

Arpaio's critics decried his continued plans to arrest illegal immigrants and said the Obama administration should sever all ties with him.

The now-rescinded authority to conduct field sweeps of illegal immigrants yielded only about 300 out of the roughly 33,000 total arrests of illegal immigrants since 2007, the Obama administration has done little to curtail Arpaio, said Frank Sharry, executive director of immigration reform advocacy group America's Voice.

"He's going to go down in history as a man who terrorised the Latino community for the sake of his own visibility and political popularity," Sharry said. "The fact that the Obama administration would lend any of its legitimacy to any of his activities is surprising and disappointing."

Arpaio was first elected sheriff in 1993.

"The department of homeland security is making a historic mistake if it continues its relationship with Sheriff Joe Arpaio," said Paco Fabian, spokesman for immigration reform advocacy group America's Voice. "The federal government is lending its full force and legitimacy to a rogue cop certain to go down in history as a serial violator of civil rights and an enemy of the Latino community."

An estimated 12 million illegal immigrants live in the US. The federal government is virtually paralysed over how to react, with conservatives like Arpaio calling for the arrest and deportation of illegal immigrants and increased border enforcement. Obama, many Democrats and some Republicans call for a system that will allow most to gain legal status after paying a fine and learning English, but reform efforts in 2006 and 2007 withered under sustained rightwing opposition.

More than 60 law enforcement agencies across the country have signed onto the same programme under which local officers are effectively deputised to enforce immigration law. But critics of the programme say it wastes police resources needed to fight street crime, promotes racial profiling of Hispanics, targets peaceful workers, breaks up families and breeds distrust of police among immigrants, who become afraid to report crime for fear they will be asked for immigration papers.

• This article was amended on 19 October 2009. The original headline read: White House strips immigration policing powers from Arizona sheriff.